Analysis of publicly available government spending seems to suggest that some very hard-won progress may be being eroded.
Specifically, a continued decline in the percentage of cloud hosting deals being awarded to SMEs over the course of 2018 has been uncovered by an independent analyst, Lindsay Smith.
Smith has just published an in-depth crunch-through of Digital Marketplace numbers that seem to suggest oft-repeated political commitments to growing the proportion of business going through the smaller independent suppliers to Whitehall have recently faltered.
As Smith writes in his report, “Looking at the 12 months to November 2018, spending on G-Cloud and DOS combined grew to £1.7 billion, a colossal increase of 45% year-on-year and now accounting for roughly 10% of the UK public sector tech spend.
“When GDP as a whole is estimated to be growing at between 1-2%, public sector tech seems to be a good place to be. Where is all that spend going?”
His answer: “[The UK] public sector is switching some large accounts to the larger infrastructure providers with the Home Office, Department for Education and HMRC seeming to lead this trend” as government departments are moving to procure services from larger providers, such as Amazon Web Services (AWS).
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As a result, SME share of hosting fell from a historical 13% share of total SME spend to 8% in the 12-months to November 2018, he warns, while his reading of GDS figures suggest that total spend to SMEs by Central Government fell in 2016/17 from 24% to 22.5%.
In a follow-up interview with Computer Weekly, he goes on to unpack his data by stating that SMEs attracted around £178m in public sector cloud hosting spend between April 2012 and November 2017 – but in the 12 months to November 2018 hosting spend to SMEs was at £48m, while total spending to SMEs in that period fell to £629m.
If this is all true, it could represent a depressing reversion to the days of oligopoly dominance of central government, which could result in poorer value for money for the taxpayer and less flexibility for departments serious about achieving digital transformation.
Over to you, Cabinet Office?